The prelate who in the Vatican was responsible for the scandal-plagued Institute for Religious Works (IOR) is to become an ambassador to Colombia, the Holy See announced on Friday.
Monsignor Ettore Balestrero is a deputy of Secretary of State Cardinal Tarcisio Bertone, the Vatican's second-highest official. Balestrero led talks with the Council of Europe's Moneyval committee about efforts to introduce greater financial transparency at IOR.
He was promoted Archbishop and will serve as an Apostolic Nuncio - the Vatican's term for an ambassador - in Bogota. His appointment was announced along with a handful of other nominations, one of the last acts of Pope Benedict XVI before he leaves his post on Thursday.
The move was announced on the day La Repubblica, an Italian newspaper, published a highly critical report on the IOR based on alleged leaks from a secret Vatican investigation, but there is no suggestion that the Holy See had acted in reaction to it.
Father Federico Lombardi, the Vatican's spokesman, told reporters that the decision about Balestrero had been taken "quite some time ago, well before the renunciation of the Holy Father," which he publicized on February 11.
According to La Repubblica, Bertone and his acolytes like Balestrero stonewalled demands by Cardinal Attilio Nicora, head of the Vatican financial watchdog, and by former IOR head Ettore Gotti Tedeschi, to introduce greater financial transparency.
"As far as we know, the IOR's accounts could contain money from (the late al-Qaeda chief Osama) bin-Laden and (jailed Cosa Nostra mafia boss Toto) Riina. We asked for information, but it was never given to us," an anonymous former IOR manager told the daily.
The IOR has been linked to many scandals in its 70-year history, including the mysterious death of Italian banker Roberto Calvi following the collapse of his Ambrosiano bank, and the disappearance of Emanuela Orlandi, the teenage daughter of a Vatican employee.
Italian prosecutors launched investigations against its managers in 2010 for money laundering. Last week a German aristocrat, Ernst von Freyberg, was appointed its new chief, ending a nine-month hiatus that started when Gotti Tedeschi was abruptly fired in May 2012.
The alleged machinations by Bertone against the former IOR president and Nicora formed a central part of the VatiLeaks scandal - caused by the publication of confidential papal papers which shed light on suspected Vatican cronyism, corruption and scheming.
La Repubblica said it found out the contents of the secret investigation three cardinals conducted on behalf of the pope on the allegations brought up by VatiLeaks. Panorama, a weekly, published similar indiscretions from the report.
Both media wrote that the cardinals had uncovered a underground gay network involving priests and lay people who were involved in blackmailing each other. La Repubblica suggested that the revelations had pushed the pontiff to resign.
Lombardi refused to comment on the matter. La Repubblica said Friday it would continue publishing material from the cardinals' report over the coming days.